On February 1, 2025, President Donald J. Trump announced the imposition of new tariffs on imports from Canada, Mexico, and China, citing national security concerns related to illegal immigration and drug trafficking. The measures include a 25% tariff on imports from Canada and Mexico, with a reduced 10% tariff specifically on Canadian energy resources, and a 10% tariff on imports from China. - whitehouse.gov

As of February 3, the 25% additional tariffs on Mexico imports have been put on hold for 30 days due to current talks. – Reuters.com

Trade Volume with Canada and Mexico

According to data from the U.S. Census Bureau, in the first ten months of 2024, the United States engaged in substantial trade with both Canada and Mexico. Total trade with Canada amounted to approximately $699.6 billion, with U.S. exports to Canada totaling $322.4 billion and imports from Canada at $377.2 billion. - census.gov

In the first three quarters of 2024, goods and services worth approximately US$600 billion crossed the U.S.-Canada border. When including trade in services, this figure rises to US$683 billion., with nearly US$350 billion in goods and services exported to Canada during this period. This data underscores Canada's position as a key trading partner for the U.S.   - economics.td.com

In the first ten months of 2024, according to data from the U.S. Census Bureau, trade with Mexico was even more significant than with Canada, totaling around $776.0 billion. U.S. exports to Mexico were valued at $309.4 billion, while imports from Mexico reached $466.6 billion. - census.gov

Regarding Mexico, in 2023, the U.S. imported goods and services valued at $530 billion and exported $367 billion to Mexico. The machinery and equipment manufacturing sector, which includes automotive and parts, accounted for $193 billion of U.S. imports from Mexico, while electronics manufacturing contributed $119 billion. These two sectors also represented significant portions of U.S. exports to Mexico, totaling $67 billion and $65 billion, respectively. - scotiabank.com

These statistics illustrate the critical importance of Canada and Mexico in U.S. trade dynamics, reflecting the extensive economic ties that have been fostered over the years.

China's Response

In response to the U.S. tariffs, China's Ministry of Commerce condemned the action, announced plans to file a legal case against the U.S. at the World Trade Organization, and stated that China "will take corresponding countermeasures to firmly safeguard its rights and interests."  - fmprc.gov.cn

Global Economic Implications

The announcement of these tariffs has led to significant reactions in global markets. Major stock indices have experienced declines, and there is heightened concern about potential disruptions to international trade and economic growth.  - theguardian.com

Economists and industry leaders have expressed concerns that the newly imposed tariffs could lead to increased costs for consumers and businesses, potentially contributing to higher inflation and affecting employment in industries reliant on international trade. A model gauging the economic impact of President Trump's tariff plan from EY Chief Economist Greg Daco suggests it would reduce U.S. economic growth by 1.5 percentage points this year, potentially ushering in "stagflation"—high inflation, stagnant economic growth, and elevated unemployment. - reuters.com

Additionally, North American companies are preparing for the effects of these tariffs, which threaten to disrupt numerous industries, including automotive, consumer goods, and energy, leading to increased costs and potential production delays. Industry leaders express concerns over increased costs for consumers and possible supply chain disruptions. The tariffs could harm industries on both sides of the border, affecting auto manufacturing, fuel, and consumer goods sectors. - reuters.com

The tariff situation is consistently evolving. Discussions are ongoing among the involved nations and within the global economic community regarding the potential impacts and future developments related to these trade measures. GVSU’s Van Andel Global Trade Center will continue to post updates as they occur.

As trade advisors and consultants, one of the most common questions we hear from small and mid-sized businesses is: “Do we need to worry about Customs compliance?” The short answer? Yes—absolutely.

Often, the realization of the importance of compliance is triggered by a new hire, an internal audit, or as international trade becomes more integrated into day-to-day operations. No matter how the awareness begins, businesses need to understand that compliance risk is a hidden but significant challenge when working with partners outside the U.S.

Uncovering Compliance Risks: The Role of Customs Entries

When we first walk into a business, we don’t know much about its import activity or the processes they have in place. Some companies have oversight mechanisms; others assume everything is running smoothly simply because shipments arrive on time. The truth is, within the first five minutes, we can usually gauge their level of compliance oversight. How? By asking one simple question: “Where are the customs entries?”

Customs Entries Hold the Key

Customs entries are the foundation of any import operation. They reveal critical details such as:

• The number of entries filed over a given period.
• Where the entries are being filed.
• Who is responsible for filing them?

If a company cannot provide these answers, tracking down customs entry data often uncovers previously unknown trade lanes and hidden risks.

The second question we ask is equally telling: “Where are the records?” Responses often include:

• “I’ve never seen the customs entries.”
• “That’s the customs broker’s job.”
• “I assume someone else handles that.”

In many cases, customs entries are sent to Accounts Payable with the broker’s invoice and then filed away—never to be seen again. This lack of oversight can expose the company to significant compliance risks.

The Importance of Oversight and Recordkeeping

Customs entries are official government filings, akin to transactional tax returns. They rely on accurate import documentation—particularly the commercial invoice. Errors in value, classification, or country of origin can lead to costly penalties. While customs brokers file these entries on your behalf, they act as service agents and are not held liable for errors. The responsibility for compliance rests squarely on the importer, as mandated by Customs under the principle of “Reasonable Care.”

To safeguard against these risks, companies must establish robust internal controls, including:

• Reviewing customs entries against commercial invoices and an audited Harmonized Tariff Schedule (HTS) classification list.
• Promptly addressing errors with customs brokers.
• Maintaining a secure record retention system indexed by entry number, date, supplier name, and related documentation.

By implementing these measures, you’ll be well-prepared to answer the pivotal question: “Where are the customs entries?”

Take the First Step Toward Compliance

Ready to build confidence in your importing practices? Join us for Van Andel Global Trade Center’s “Basics of Importing” training. This workshop will provide the foundational knowledge you need to navigate U.S. Customs regulations, manage compliance risks, and import goods effectively and efficiently.

Visit our Upcoming Events page to register and take the next step toward a more informed and compliant import process.

by Luke Notorangelo

The United States-Mexico-Canada Agreement (USMCA), which replaced NAFTA on July 1, 2020, aimed to modernize trade between the U.S., Canada, and Mexico, incorporating more flexibility and advanced technological strategies. The article Driving Capital underscores how the USMCA and the Inflation Reduction Act (IRA) have catalyzed job creation and investment in Michigan, especially in the automotive sector’s shift toward sustainability. The Wilson Center's analysis further highlights the USMCA's role in strengthening supply chains and addressing geopolitical challenges. Meanwhile, the Atlantic Council notes that upcoming elections in Mexico and the U.S. could significantly influence the Agreement's future. Collectively, these perspectives reveal the USMCA’s pivotal role in shaping economic resilience and sustainability across North America.

Impact on Michigan’s Labor Market

The USMCA has significantly impacted Michigan's labor market, particularly in the automotive industry, driving job creation and investment in electric vehicle manufacturing. The Agreement's requirement that a substantial portion of automotive content be produced by workers earning at least $16 per hour is a key step in raising wage standards and supporting labor rights. Mechanisms like the Rapid Response Labor Mechanism (RRLM) empower workers to report labor violations, enhancing protections.

However, there are challenges. Some Michigan companies have closed operations in Mexico due to compliance issues, raising concerns about job stability and competition. This underscores the delicate balance Michigan workers face as the automotive sector evolves.

With the IRA encouraging growth in Mexico’s automotive sector, Michigan’s labor market stands at a crossroads—facing both opportunities and uncertainties. The upcoming USMCA review in 2026 will likely shape the future for workers and businesses alike, offering a chance to critique and adjust the Agreement to ensure long-term benefits for North American trade.

Four Years of USMCA: Looking Ahead

Despite global supply chain challenges such as the COVID-19 pandemic, Russia’s invasion of Ukraine, and tensions with China, trade between the USMCA nations has surged by 50%. This growth underscores the strength of the Agreement in managing trade disputes and overcoming supply chain disruptions. Beyond economics, the USMCA reflects a broader shift in globalization, emphasizing sustainability, transparency, and resilience.

As the USMCA reaches its fourth anniversary, it’s clear that while much has been accomplished, unresolved disputes and future challenges remain. Elections in Mexico, the U.S., and Canada could introduce new policies that reshape the trade landscape. Monitoring these developments is essential to maximizing the Agreement’s potential and ensuring a successful 2026 review.

The 2026 USMCA Review: Why It Matters for Michigan Trade

The USMCA includes a unique review process, with a critical evaluation scheduled for July 1, 2026. This review will determine whether the Agreement will be extended for another 16 years or if periodic evaluations will occur. The review will focus on compliance in key areas like telecommunications and labor rights. As political debates intensify, particularly around migration and drug trafficking, Mexico must solidify its position as a reliable partner in North American trade to ensure a successful review.

USMCA in 2024: Notable Considerations

As we mark the fourth anniversary of the USMCA, it's evident that the Agreement is more than just a trade deal—it’s a vital support for Michigan's labor market and a symbol of resilience for North America’s economic future. Growth in the automotive sector and broader trade has positioned the region toward a more sustainable and equitable economy. Yet, upcoming reviews and elections could significantly reshape this framework, making it crucial for businesses, workers, and policymakers to stay engaged. Decisions made now will impact job stability and competition in Michigan, laying the foundation for a stronger North American economy.

Expand Your Knowledge of International Trade

Looking to deepen your understanding of The United States-Mexico-Canada Agreement (USMCA)? Join us at an October, Basics of USMCA training event! Learn valuable insights, expand your network, and discover how the Van Andel Global Trade Center can support your international growth. Register today to secure your spot!

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About the Contributor

Luke Notorangelo is currently a Marketing and Sales Student Assistant at the Van Andel Global Trade Center. Luke is a senior studying Business Administration with a concentration in Marketing at Grand Valley State University. He enjoys going to the gym, watching a good sports game, spending time with friends, and exploring new noteworthy restaurants in the area.

By CNBC's Lori Ann LaRocco

Billions in trade came to a screeching halt at U.S. East Coast and Gulf Coast ports after members of the International Longshoremen’s Association, or ILA, began walking off the job after 12:01 a.m. ET on Tuesday.

The ILA is North America’s largest longshoremen’s union, with roughly 50,000 of its 85,000 members making good on the threat to strike at 14 major ports subject to a just-expired master contract with the United States Maritime Alliance, or USMX, and picketing workers beginning to appear at ports. The union and port ownership group failed to reach agreement by midnight on a new contract in a protracted battle over wage increases and use of automation.

In a last-ditch effort on Monday to avert a strike that will cause significant harm to the U.S. economy if it is lengthy — at least hundreds of millions of dollars a day at the largest ports like New York/New Jersey — the USMX offered a nearly 50% wage hike over six years, but that was rejected by the ILA, according to a source close to the negotiations, who was granted anonymity to speak about the private negotiations. The port ownership group said it hoped the offer would lead to a resumption of collective bargaining.

Read the full article here.

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CNBC  This piece of content has been aggregated from an outside website.